Loblaws’ price-fixing on bread may have cost you at least $400

$50 bills sticking out of a toaster: (iStock; Shutterstock)© Used with permission of / © Rogers Media Inc. 2018.
(iStock; Shutterstock)

As word emerged about the Loblaws chain and bread-maker George Weston Ltd. confessing their role in a massive price-fixing scheme, analysts often referred to bread as a supermarket loss leader. Think of this like your favourite pub’s wing night: they lower prices to a level below what it costs to make and serve them, in hopes of getting patrons in the door and guzzling beer. Wonder Bread or Dempster’s Whole Wheat, the argument goes, would similarly be offered at cut-rate prices to bring in shoppers who will generate money for grocers in other aisles.

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It’s hard for analysts to say definitively that bagged bread is a loss leader; there’s plenty that isn’t clear about the economics in Canadian grocery stores, as evidenced by the Competition Bureau’s ongoing price-fixing investigation of multiple chains and suppliers, on top of the fact the scheme Loblaws and its sister manufacturing company admitted went undetected from mid-2001 until March 2015.

Moreover, many of the price figures we can see suggest bread is the opposite of a loss leader. Rather, there are many signals and comparisons that suggest bread became a much more lucrative product for supermarkets over the

Article source: http://www.msn.com/en-ca/money/topstories/loblaws%E2%80%99-price-fixing-on-bread-may-have-cost-you-at-least-dollar400/ar-AAuABTF?srcref=rss